Political and business leaders meet at China summit

Updated
April 05, 2013 08:00:00

The Prime Minister and three government ministers are among the Australian politicians who will mingle with business people at the Boao Forum in China - one of Asia's biggest economic meetings. The question likely to be occupying many people's minds is whether China's economy is expanding. But politics won't be too far behind. China's ties to North Korea and its record on human rights are subjects that are likely to demand attention.

TONY EASTLEY: The Prime Minister and three government ministers are among the politicians who will mingle with business people at the conference and at other meetings in China.

The question likely to be occupying many people's minds is whether China's economy is expanding.

But politics won't be too far behind. China's ties to North Korea and its record on human rights are subjects that are likely to demand attention.

China correspondent Stephen McDonell reports from Hainan Island.

STEPHEN MCDONELL: Each year China invites business and political leaders to this island to thrash out economic disputes and promote world trade.

When Prime Minister Julia Gillard arrives on Hainan tonight as head of the Australian Government delegation she'll join some high-powered business figures as well. CEOs or chairmen are expected from the likes of Westpac, Macquarie, Transfield, Qantas and the like.

And the China they are entering is one which many analysts see as having renewed economic prospects where elsewhere there is gloom.

A study by Morgan Stanley has found that China's household consumption could be much higher than official statistics suggest - in fact making up nearly half of this country's GDP growth.According to the bank research, China's official statisticians have significantly under-estimated purchases made online.

If true it'd mean the Chinese government's strategy of bolstering domestic demand to make up for lost export revenue could be working.

New orders at Chinese factories have hit an 11-month high and even steel production, requiring Australian iron ore, seems pretty healthy.

Ge Xin is deputy director of the Lange Steel Information Research Centre.

(Sound of Ge Xin speaking)

"It's certain that China's economy will keep growing," he says "and the consumption of steel will increase."

Associate professor Gao Cheng from Chinese Academy of Social Sciences is also optimistic about Australian iron ore sales to China.

(Sound of Gao Cheng speaking)

"The speed of increase may go down due to China's economic slowing down," she says, "but the trade volume will definitely go up because China is still in the process of urbanisation and it remains a big steel exporter."

China's industrial machine is facing a major hurdle with old and inefficient equipment pouring record amounts of pollution into the air. But here analysts also see opportunities for Australian exporters providing greener technology to serve this country's needs.

In addition this Australian mission to China will be trying to steer the economic relationship beyond coal and iron ore into areas like education, finance and the massively expanding Chinese tourist trade, which is all too clearly on display where I am sitting right now.